Costs will drive manufacturing design services offshore

UK manufacturers will spend billions of pounds on offshore product design services over the next few years, according to a survey by ARC Advisory Group.

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UK manufacturers will spend billions of pounds on offshore product design services over the next few years, according to a survey by ARC Advisory Group.

The worldwide market for designing manufacturing components, sub-assemblies and similar design services is expected to grow 28% over the next five years, according to Steve Banker, an analyst at the research company.

ARC found that discrete manufacturers, such as those in the aerospace and automotive industries, plan to spend $4.1bn (£2.1bn) on such services in 2011, up from $1.2bn (£600m) in 2006. This investment is driven by shortages of engineers with specific skills and the lure of cheaper labour in India and elsewhere.

Most of the outsourced product design functions today are for low-end operations, such as converting 3D designs into 2D images for product manuals or designing a steering wheel for a car or a seat for a plane. Longer term, Banker expects manufacturers will turn to offshore firms to create more complex products.

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